Be realistic, Square, small caps

Here’s part 3 of 3 of the transcript to this week’s Live Trading With Cody Q&A Chat.

Q: Cody, my portfolio is $200,000. I’m 57 years old. Unless I do things that you advise me against (risky stuff), how am I supposed to be able to have enough to live on if I retire in fifteen years?

A: Again, there is no easy answer. I can’t tell you that you can turn $200,000 into $2 million to retire in fifteen years. Now, Trading With Cody subscribers, we’ve had some stocks that have gone up huge: 10,000%; 17,000% gain on Apple; we’ve got 5,000% gain on some of our stocks; 500% gain on Nvidia and some of our others in the last couple of years. And even that is going to be hard pressed to go up tenfold– your whole portfolio in ten years– but it could happen.

The only way that you would be able to do it is 1) you’ve got to keep working and put away twenty to forty grand a year. And if you’re not making enough to do that, let’s just be realistic that you might not get there. You might need to work more than fifteen years. Don’t overextend yourself and start gambling in the stock market, going crazy trying to make huge gains. I’ve seen so many retail investors over the years blow their portfolios up because they wanted that thousand percent gain in their portfolio to retire or to be rich or to be comfortable or whatever their reason was.

And 2) you’ve got to be realistic about your situation. I will tell you that you can’t go crazy. You should own some revolution investing stocks, but if you’re 57 years old and your total portfolio is $200,000 you shouldn’t have all of that in tech stocks and revolution investing stocks, even great ones like Apple and Google. You need to diversify yourself a little bit and that’s going to cap potential gains. Just be realistic and work hard and invest well and buy revolution investing stocks. You know, Trading With Cody, we’ll have some great calls over the next five, ten, fifteen years for you, but know that there’s no easy way to get a tenfold return on your portfolio. I mean, that’s what everybody on the planet is trying to pay billionaire hedge fund managers to do and the billionaire hedge fund managers can’t do it either.

I look at my own track record over the last ten to fifteen years and I couldn’t be any prouder because I think I’ve outperformed every hedge fund manager on the planet. I think that Trading With Cody subscribers would tell you they have, over the last seven years, had a hell of a run. But even that, it’s just tough. That is the answer to your question, I’m sorry to tell you. Just be realistic.

Q: I’ve been in and out of Square ($SQ) from the IPO and now have it as a core holding in my financial tech basket. Thoughts?

A: Boy, you sound like a momentum chaser between Extreme and Square. What a tear Square has been on. Look, Square is up from $12 to $47 in the last year. Just sixty days ago, it was at $30 and then it was almost at $40 and then at $63 or so they announced that they were getting into the Bitcoin payment business. They were going to work on Bitcoin payments and accepting them (and, again, making another validation for cryptocurrencies). But the fact is that Square popped $10 now. It’s up to $46 from $36 in three days-four days-a week because of this news, and that is a sign of the excesses in this bubble-blowing bull market. And I’m thinking near term this makes me even more nervous about the stock market. This reminds me of the 1999 dot-com bubble when K-tel announced that they were going to start a website so you didn’t have to order their CDs from TV commercials. You would actually have a website to pick from and the stock went up like a $1.40.

Things were crazy back then. This is a little crazy. To go back to the question, Square is a great company and I should have bought it. Really, it’s one of my big regrets in the last year. I saw that thing at $12 a year ago and my wife and I had a big discussion about it. She uses it at her office and I hate my PayPal service that I use for my Trading With Cody stuff. Anyway, I missed Square. It’s up four fold since then. I hate that. It’s a great company. I’ve written about it for two years now though I don’t know that I’d want to chase it at $47. But, if you’ve owned it for a while and you’ve got it as a core holding I probably would trim some and lock in some profits, but I wouldn’t run or get scared out of it or anything.

Q. How about about $OKTA?

A. I don’t know the stock off of the top of my head. I think I’ve answered about it before, but I’ll have to look it up. $AXTI is another one that someone’s asking about. Let’s see if it’s a penny stock. Ten bucks, $300 million dollar market cap. It’s not a penny stock, but it was two years ago. I don’t know. Small cap names like that I’ll have to do a little bit of homework, but I will. Trading With Cody subscribers will get an update. I’ll answer these questions and send that part out, but I’m not going to bore everyone with re-looking them up.

Let’s see what $OKTA is, just if it’s a penny stock or not. No, it’s not a penny stock either. Oh, I have heard of this one. I’ll take a look at it. It’s a $3 billion dollar market cap. I should know more about it. Can’t know ‘em all.

Q: Yo Cody. $EXTR continues to roar. What do you think?

A: That’s Extreme Communications. I traded and owned Extreme back in 2005-07 or so and it never went anywhere and I frankly haven’t followed it much. I’ve seen the stock cross my tickers on occasion when I’m watching CNBC or something and I think it’s tripled recently. Probably all the more reason I wouldn’t want to chase it right now, but I’ll take a fresh look at Extreme. Who knows? If their growth rate is through the roof and the stock is cheap then we got an opportunity. I’ll look it up.

Q: Any thoughts on $EKSO or other exoskeleton companies helping increase production?

A: Let’s look up $EKSO. Guys, if it’s a penny stock I’m going to tell you to run for the hills. I don’t buy penny stocks. This is a $3 stock. In rare cases, I end up meeting the CEO and I really like them– for example AxoGen is a stock that we’ve owned that’s gone from $4 to $25 dollars now. That’s a rare thing, though. I don’t very often like to even try to find penny stocks. So, I’m going to tell you right now that Ekso Bionics is probably not going to be a stock I want to buy.

I think that might be it for the questions. The guy I just answered the question regarding his portfolio being at $200,000 just wrote me back and said, “Thanks man, got it.” And, thank you. Other subscription services will promise you the world– and I couldn’t be any prouder of my track record and I think I’ll have some more great ideas– but, we’ve got to be realistic and you got to know that if you’re 57 and you’ve got $200K put back in your stocks and your IRA combined then you’ve got more work cut out for you.

Whew! It takes a lot of power and energy to do these calls. I don’t know how Howard Stern does this stuff for three to four hours a day, everyday.

Any other questions? Sorry that the conference call number didn’t work for those of you that tried to call in. That was a little bit frustrating, but at least we’re getting some great discussion going on even without the live interaction.

Go to tradingwithcody.com if you’re not a subscriber. Sign up. You’ll become a better investor, and challenge a lot of your thoughts and conventional wisdom.

Headline right now: “Nasdaq notches all-time high as it paces Tuesday stock market advances.” I hate to say I told you so, but I told you so seven years ago, baby.

I think I might wrap this sucker up. Thank you for joining. Thanks for the questions. Peace, love and happiness. Talk to ya soon.